BEIJING/SHANGHAI: China’s CATL is planning a major new automotive battery plant in Shanghai, continuing a blistering pace of expansion that will cement its lead as the world’s No.1 supplier, two people with knowledge of the matter said. Locating the factory in Shanghai will put it close to Tesla Inc’s Chinese production base after it began supplying batteries for the US automaker’s Model 3 cars in China last year.

CATL hopes to rapidly expand that relationship, aiming to become its biggest supplier in the near future by providing half of the battery cells Tesla uses globally in electric vehicles and roof energy storage, said a senior source at the Chinese company.

The new plant would be able to make 80 gigawatt-hours of battery cells a year, a second person said, which would come on top of 69.1GWh in current production capacity and another 77.5GWh under construction.

CATL has been in talks with the Shanghai government about building the factory, the people said, adding that the location will also enable the company to draw upon a larger and more diversified talent pool than its headquarters in Ningde in southeastern China.

It was not immediately clear when a final agreement might be reached or when CATL hopes to have the new plant up and running.

CATL said that it is in talks with Tesla about more collaboration and Tesla is seeking help from the company on battery solutions, but declined to comment on any plans for additional production capacity.